BETTER COTTON CHAIN OF CUSTODY GUIDELINES V1 · To keep Better Cotton segregated from conventional...
Transcript of BETTER COTTON CHAIN OF CUSTODY GUIDELINES V1 · To keep Better Cotton segregated from conventional...
BETTER COTTON CHAIN OF
CUSTODY GUIDELINES V1.3
Summary of revisions
May 2018
ABOUT THIS DOCUMENT
Provides an overview of the key changes
in the revised Better Cotton Chain of
Custody Guidelines (v1.3)
Four sections:
1. Background and summary of key
changes
2. Changes for Implementing Partners
3. Changes for Gins
4. Changes for all Other Supply Chain
Organisations
Note this is a summary of changes only –
please refer to the full CoC v1.3 for full
detail (available on the BCI website here)
BACKGROUND
BCI has carried out a minor revision of the
Chain of Custody (CoC) Guidelines in 2017
to clean up and restructure the document
The updated version 1.3 was released on 1
May 2018, applicable from 1 August 2018
The main objective is to ensure the CoC
Guidelines are clear and up-to-date,
through:
1. Removing outdated or duplicative content
2. Clarifying unclear requirements
3. Providing more detail on BCI’s approach
to supply chain monitoring and penalties
Most changes are minor – the basic Better Cotton Chain of Custody
model remains the same (product segregation from farm to gin
level, and mass balance after the gin)
SUMMARY OF KEY CHANGES
Simplified structure, with Chain of
Custody (CoC) requirements for:
▪ Implementing Partners
▪ Gins
▪ (All) Other Supply Chain
Organisations
New guidance added throughout– guidance is not mandatory,
but intended to provide useful context and examples
Revised and expanded definitions now included
BCI’s online volume tracking system, the Better Cotton Tracer,
has now been renamed the Better Cotton Platform (BCP ) –
although functionality has not changed
Mandatory use of the BCP will be expanded to all supply
chain organisations by 1 Jan 2020
SUMMARY OF KEY CHANGES (CONT.)
Clarified responsibilities for Implementing Partners with respect to
control of Better Cotton from farm to gin and farmer training
Clarified requirements for gins to be able to trace Better Cotton
back to licensed BCI farmers and maintain purchase records
(even if buying from middlemen)
New maximum timelines for entering purchase/ sales into the
Better Cotton Platform (BCP): 30 days for gins and 60 days for
all others
New, reduced 2 year requirement to maintain purchase/ sale
records (previously 5 years)
Mandatory transaction reference numbers now required for all
purchases/ sales entered into the BCP (for better data
verification)
Additional detail included on BCI supply chain monitoring
processes and penalties for non-compliance
SUPPLY CHAIN MONITORING AND
PENALTIES
The CoC Guidelines now include more detail
on supply chain monitoring
BCI will be carrying out increased monitoring
and 3rd party audits of gins and other supply
chain organisations – these visits check
compliance with the CoC Guidelines
BCI or 3rd party audits may also request
purchase or sale documents remotely via
email – documents are to be provided within
10 days
Penalties for non-compliance with CoC
Guidelines include minor/ major non-
conformities, or suspension from the BCP
[refer to the CoC Guidelines v1.3 for more
detail]
This section outlines key
CoC changes for:
• Implementing Partners
• Gins
• Other Supply Chain
Organisations
CHANGES FOR BCI IMPLEMENTING
PARTNERS
Background – farm to gin control
Controlling the flow of Better Cotton from farm
to gin is a critical step in the BCI programme
Farmers, middlemen, and ginners must
understand and implement the requirement to
keep Better Cotton segregated from
conventional cotton at all stages
Gins must be able to trace back all Better
Cotton to licensed BCI Farmers, and must
keep records to prove this
With the revised BCI P&C v2.0 requiring
farmers to maintain sales records (indicators
7.3.5/7.3.6) BCI will increasingly be able to
cross-check records between farmers and
gins when necessary
UPDATED COC REQUIREMENTS FOR
IMPLEMENTING PARTNERS
Previous CoC Guidelines included
requirements for IPs that were not practical
to enforce – e.g. asking IPs to facilitate
procurement logistics, ensure accurate
weighing of cotton, etc.
These have now been simplified to better
reflect actual expectations for IPs related
to Chain of Custody
IP CoC requirements now cover 3 areas:
1. Connecting farmers and ginners
2. Segregation and documentation of Better
Cotton between farm and gin
3. Distribution of Annual Authorised Volume
(AAV) codes
UPDATED COC REQUIREMENTS FOR IMPLEMENTING
PARTNERS
Connecting farmers and ginners – IPs need to provide the BCI
Supply Chain team with details of potential ginners at least 3 months
before start of the harvest season
IPs must train all IP staff and farmers on relevant CoC-related
requirements (and keep records of this training)
They must ensure farmers are trained and understand their relevant
CoC responsibilities:
To keep Better Cotton segregated from conventional cotton at all
points of harvest, storage, sale and transport
To keep AAV/ farmer codes secure (if relevant – in some cases codes
are not shared directly with farmers)
To maintain records of their sales of seed Better Cotton (as required in
the revised BCI P&C, indicators 7.3.5/7.3.6)
KEY CHANGES – now more specific requirement for IPs to train farmers on
their relevant CoC responsibilities (and keep records of this training)
UPDATED COC REQUIREMENTS FOR
IMPLEMENTING PARTNERS
Distribution of Annual Authorised Volume
(AAV) codes
Where relevant, IPs must share AAV
codes with farmers within two weeks of
receiving the codes.
If Producer Units do not distribute AAV
codes to farmers, the IP must ensure
there is another system in place for gins to
verify that they are purchasing Better
Cotton from licensed BCI farmers
New requirement that IPs must inform BCI
of any potential or suspected mis-use of
AAV codes (i.e. ginners entering AAV
codes without legitimate purchases)
This section outlines key
CoC changes for:
• Implementing Partners
• Gins
• Other Supply Chain
Organisations
UPDATED COC REQUIREMENTS FOR GINS
Purchasing and control of middlemen
Gins are required to be able to trace all seed Better Cotton back to
licensed BCI Farmers, and keep records of each purchase -
including seller, purchase date, volume, and AAV or farmer code (if
purchasing directly from a farmer)
New requirement for gins to document their process for procuring
Better Cotton and the flow of Better Cotton from farm to gin
If buying from a market or middleman, the gin will also need to:
keep an updated list of all markets/ middlemen from whom
they buy Better Cotton
Ensure that middlemen have systems to keep Better Cotton
segregated and can trace it back to licensed BCI farmers
Obtain from each middlemen purchase records showing the
BCI Farmer, date of purchase, and volume
UPDATED COC REQUIREMENTS FOR GINS (CONT.)
Segregation and identification
Gins will still need systems in place to keep Better Cotton segregated from
conventional cotton and identifiable at all stages of handling
In addition, all workers handing Better Cotton must understand the
process for segregation (monitoring visits/ audits may interview workers)
More specific requirement that gins need to ensure Better Cotton bales
can be clearly identified (on bales and/or accompanying documentation)
as Better Cotton
Responsibilities, training and record-keeping
Records now only need to be maintained for 2 years (not 5 years) – this
means gins should have all purchase/ sale documents for Better Cotton
available from current and previous season
New requirement to communicate any changes to BCI staff in writing with
15 days – e.g. change in BCI contact person, procurement processes,
outsourcing arrangements, etc
UPDATED COC REQUIREMENTS FOR GINS
Use of the Better Cotton Platform (formerly the ‘Tracer’)
New requirement to enter all purchase/ sales into the Better Cotton
Platform (BCP) within 30 days – this will help ensure BCP data is
accurate and verifiable
New requirement to enter in the BCP purchase date/ date range for
all purchase transactions entered in the system
New requirement to enter the invoice number (or delivery slip) for all
sales entered into the BCP – this enables better verification of data
Subcontractors (except transport companies)
Must document the nature of the outsourcing agreement and share
in writing with BCI (except for transport companies)
All subcontractors must sign a declaration agreeing to comply with
Better Cotton CoC requirements and provide access to sites and
records
UPDATED COC REQUIREMENTS FOR GINS
Supply chain monitoring
Additional detail on gin monitoring and third party audits now
included, along with penalties for non-compliance
Gin monitoring/ audits may include interviews with farmers to cross-
check a sample of purchase records – more information and
protocols will be available on the BCI website
BCI will introduce a revised Ginner Agreement, which will include an Annex
with all relevant Chain of Custody requirements for gins
This section outlines key
CoC changes for:
• Implementing Partners
• Gins
• Other Supply Chain
Organisations
OVERVIEW
This section applies to all companies
buying or selling Better Cotton products
after gin level – i.e. spinners, traders,
garment manufacturers, fabric mills, end-
product manufacturers, brands/ retailers,
etc.
Mass balance chain of custody model
still applies to all companies after gin
level
Refer to the Introduction section of
the Chain of Custody Guidelines v1.3
for more explanation
KEY CHANGES FOR ALL OTHER SUPPLY CHAIN
ORGANISATIONS
Responsibilities, training and record-keeping
Purchase and sale records for Better Cotton products now only
need to be maintained for 2 years (not 5 years) – electronic or
paper-based
More specific requirement that all workers responsible for
compliance with the CoC requirements must be trained and
competent (workers may be interviewed during audits)
Any staff using the Better Cotton Platform (BCP) must have
completed specific training on the BCP (available from BCI)
Now required to communicate any relevant changes to BCI with 15
days – change in BCI contact person or organisational structure
(e.g. merger) that affects set-up in the BCP and sourcing of Better
Cotton products
KEY CHANGES FOR ALL OTHER SUPPLY CHAIN
ORGANISATIONS
Use of the Better Cotton Platform (BCP)
New requirement to enter all purchase/ sales into the BCP within
60 days of the shipment date – this will help ensure data in the
BCP is accurate and verifiable
Retailer/ brands only can have a 30 day window to
acknowledge a transaction entered by a supplier
Now mandatory requirement to enter a Transaction Reference
Number (e.g. invoice or delivery slip #) for all purchases/ sales in
the BCP – this will improve auditability of data in the BCP
If purchases/ sales are ‘grouped together’ in one BCP entry, a
separate reference number, or range (e.g. invoice #s 54001-
54020) must provided for each individual purchase or sale
KEY CHANGES FOR ALL OTHER SUPPLY CHAIN
ORGANISATIONS
Use of the Better Cotton Platform (cont.)
More explicit requirements that any transaction entered in the BCP
must relate to a physical purchase or sale of Better Cotton products
i.e. no BCCUs can be transferred unless they are linked to an
actual physical purchase or sale
Specific requirements for fabric mills or end-product manufacturers
that need to transfer BCCUs directly to the end-buyer (e.g. retailer)
More specific and updated requirements on using Output Declaration
Forms – these are required when selling to a buyer who is not using
the BCP
Annual reconciliation for retailer/ brands
Explicit requirement for all retailer/ brands to reconcile data in the
BCP by 31st December for each year [this means all purchases of
Better Cotton for the calendar year must be entered in the BCP by
this deadline]
KEY CHANGES FOR ALL OTHER SUPPLY CHAIN ORGANISATIONS
Expanded use of the Better Cotton platform
Currently all ginners, cotton traders, spinners, and brand/retailers are
required to use the BCP to enter purchases/ sales of Better Cotton
products
Use of the BCP has been optional for other organisations
However, from 1 January 2020, all supply chain organisations
will be required to use the BCP if they are buying/ selling Better
Cotton products
This includes e.g. fabric mills, garment manufacturers, end
product manufacturers, sourcing agents, import-export
companies, waste traders, waste processors, paper mills and
nonwoven fabric manufacturers
This change will eventually eliminate the use of ‘Output Declaration Forms’ and
help ensure better credibility/ transparency throughout Better Cotton supply chains
– while giving companies a gradual transition time to begin using the BCP
Please note this document includes
a summary of changes only
Please refer to the full Better
Cotton Chain of Custody
Guidelines v1.3 (available on the
BCI website here) for additional
clarification and detail